Huge Hashrate Increase

The hashrate is exploding in bitcoin. What could this mean? There’s a theory that’s floating around that this is Jihan trying to pump the difficulty up before the UASF can split on Aug 1st. I think this exposes Jihan’s intention to not activate SW with segwit2x. This is also a great opportunity for signatories to the NYA to band together with the UASF to ensure SW does get activated.

Jihan Talks to Theo Goodman

In this video we can see the complete disregard that Jihan Wu, CEO of Bitmain, has for users of bitcoin. In his mind, he’s in charge. He makes decisions of what’s right and wrong ethically in upgrades. That’s completely backwards. Users demand miners coins, not because miners have applied a lot of PoW, miners apply PoW because users demand the coins.

Jihan also laughs at users when talking about the UASF. Remember, the UASF in Litecoin forced miners to capitulate, and it will do so in bitcoin as well.

Gresham’s Law

I just read from Wikipedia here about Gresham’s Law and then I try and tie it back to bitcoin.

US Congress Trying to Stop Bitcoin at the Border

This shit would be funny, if it wasn’t so real. The bill expands Civil Asset Forfeiture to gift cards, mobile banks apps and bitcoin. It includes powers to seize all bank accounts, safety deposit boxes and more if you don’t fill out this form or are caught trying to take more than $10k in value out of the USSA. The penalties go still further and add criminal penalties as well. So you can serve jail time after they’ve taken every single penny of value you had.SEC. 13. PREPAID ACCESS DEVICES, DIGITAL CURRENCIES, OR OTHER SIMILAR INSTRUMENTS
by inserting “prepaid access devices, digital currency, or any digital exchanger or tumbler of digital currency”

“(7) ‘prepaid access device’ means an electronic device or vehicle, such as a card, plate, code, number, electronic serial number,
mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of
funds that have been paid in advance and can be retrievable and transferable at some point in the future.”

Bitcoin On Mises

This article primarily examines the inflationary vs deflationary aspect of bitcoin. Two things jumped out at me, 1) they said the Fed rate hike, which happened on the same day as the Bitmain HF announcement, was the reason for the market pullback, and 2) that Austrian Economists are starting to explore the interesting new inflationary model of bitcoin.

Bitcoin is still very small at $50 bil market cap, and it’s not particularly reactive to legacy currency developments. The Yuan correlation was an exception, but not due to fundamentals, it was due to the perceived and constantly talked about possible connection in a time that was generally less newsworthy in bitcoin itself.

Inflation should properly be looked at as an increase in the monetary supply in the fiat or even gold and silver, but bitcoin is new. For the first time in the history of the world, the monetary supply can increase at a knowable rate with a concrete eventual cap. Bitcoin is not inflationary or deflationary as previously defined.

Thoughts on Lightning

Now that we know we are getting Segwit, (and the miners (and early investors) are put in their place in regards protocol development) we can start talking about how lightning networks will look.

This is a cool development from the chinese exchanges, they are connecting through payment channels. (note: these are channels between trusted parties and don’t really need segwit) It goes with what I’ve said previously during the heat of the scaling debate, why all the pressure on protocol devs? Where’s the corporate or business devs? What the hell are they doing? Now the exchanges are finally stepping up to take some of the transactions off chain.

I think exchanges will be the primary impetus behind the spread of lightning networks. It’ll start like this one, with a few exchanges and vendors. Over the next 2-5 years we’ll see them expand to include a balanced ecosystem of their own. There will likely be competing ecosystems built around a few central exchanges each and/or on-ramps and off-ramps.

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